Does the average American consumer know or care that GM owns Saturn? Or Toyota Scion? Nope. TTAC has been arguing since ever that brands are the heart and soul of any and all car companies; it's how people perceive the products vying for their patronage. Automotive News [AN, sub] has run an analysis of U.S. car sales by brand for the first nine months of '07, and there's blood all over the carpet. A cataclysmic shift leaves Toyota the undisputed king of cars. "The Japanese juggernaut slashed the retail sales gap with GM by 40 percent during the first eight months of 2007… GM's retail advantage dropped from 487,235 vehicles for that period last year to 282,677 vehicles this year. If current trends continue, AN predicts ToMoCo will wrest the overall number one spot from GM within four years (by 2011). In fact, the Chevrolet Impala is the only domestic vehicle that appears in the nine-month top-10 automotive list, trailing the Toyota Camry by over 100k units. (Take fleet sales out of that equation…) Meanwhile, "Honda has quiely risen to number three in U.S. car sales, looking at achieving 10 percent of the U.S. light-vehicle market by year's end. Ford has tanked. The Blue Oval Boyz' overall sales are down 13.3 percent. They've lost sales every month this year and dropped nearly two points of market share. In the upmarket automotive arena, Lexus is set to topple Cadillac as America's favorite luxury brand, heading for '07 totals that will beat Cadillac's best ever sales year. 

The South African term [of endearment] for a pickup truck is a "bakkie." Right. So. While the world waits and wonders about the potential impact of a flood of Chinese-made cars on the international auto scene, iAfrica reports that cheap Chinese pickups are pouring into the South African market, driving down prices of two to three-year-old Japanese bakkies. While owner-drivers are still opting for "quality," the fleet market is one with the Chinese pickups' "cheap as chips" appeal. Brand Pretorius, chairman of McCarthy Motor Holdings, says he's not worried that Chinese cars will have a similar effect on the passenger vehicle market. With freight costs and a 30 percent import tariff, Chinese automakers fight an uphill battle against locally made product with export credits (e.g. the Chevrolet Spark). "It will be tough for Chinese manufacturers to undercut the current entry-level small cars by a significant margin, so the impact won't be as severe."  

Automotive News [AN, sub] has not one but two article's about Detroit's [supposed] design excellence– actual or eventual. First, former Car and Driver editor William Jeanes wants us to know that GM's sun will come out tomorrow is out, design-wise. "Like that hint of springtime, it is suddenly apparent that a design renaissance has taken hold at GM… No one, not even Lutz, can change perception overnight. But you have to start somewhere, and he and the GM designers have rolled a grenade into the room…" Next, Steven Cole Smith is pleased to report that the non-car guys heading Ford and Chrysler are staying the Hell away from the design studios– lest they screw-up the aforementioned design renaissance. "'Let's face it,' said a Ford executive who asked not to be identified. 'Alan [Mulally] has bigger problems to deal with than how the headlights should look on an F-150. Plus, he's proven that he delegates responsibility to those who deserve it, and the design staff deserves it.'" In case you prefer a non-fiction quote, Chrysler 300 designer Ralph Gilles says Nardelli's been a good boy. "Bob… seems to be one of those guys who knows what he doesn't know… He's keen on what we do. His cautiousness is very encouraging." 

Yesterday, we reported on a Canadian class action lawsuit claiming carmakers and dealers conspired to violate “competition and consumer protection laws” to artificially inflate new car prices. Today, the National Post reports that Porsche is lowering prices on its 2008 models in Canada by more that 10 percent– plus an additional 2 percent on an “equipment adjusted basis” when compared to an ’07 model. "We cannot ignore our customers and dealers in Canada who can look to the U.S. and recognize a substantial price difference," says the president and CEO of Porsche North America. Yes, but– the price of a new Porsche will remain higher than those sold in the US. Assuming the loonie is at parity with the US dollar, a 2008 Cayenne will still cost some 27 percent more in Canada (C$55,200) than German sport trucks sold south of the border (US$43,400). Still, Porsche’s Schwarzenbauer's back remains patted: "We listened to the market and did what is best for our customers in Canada."

India’s economy is growing fast. Too fast. To curb inflation, the country’s central bank has been busy raising interest rates. Bloomburg.com reports the result at the auto industry’s sharp end: new car loans are the most expensive they’ve been in five years. As nearly 75 percent of all of India’s fresh whips are purchased on credit, the new car market has slumped since June. Most Indian automakers are reacting to the credit crunch by trimming production or holding off on new factories. With plans for three new plants in the next 18 months, Tata managing director Ravi Kant has decided to offer new customers deep discounts to move the metal. If and how this will effect the Indian automaker’s bid for Ford’s damaged Jaguar brand is uncertain, but it can’t help.

J.D. Power and Associates has just released their 2007 Escaped Shopper Study (an APB has been issued). After surveying 31,355 new-vehicle buyers between May and July 2007, J.D.'s mob says that 80 percent of US new car buyers won't cross-shop an import (if they're domestically inclined) or a domestic (if they're a import inclined). That's bad news for The Big 2.8. But it gets worse. The 20 percent of buyers up for grabs "frequently decide against import brands for financial reasons, most often citing that the import didn't offer aggressive rebates or other incentives." In other words, Detroit's fire sales have caught up with them but good; they're high cost producers appealing to a price-focused audience. At the same time, the study says import buyers who reject a domestic model cite "perceived vehicle attribute deficiencies:" concerns for reliability, gas mileage or poor resale value. J.D.'s automotive retail research manager connects the dots. "To win back market share, domestics are faced with two alternatives," Kara Steslicki opines. "Either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand." Not bloody likely then.

"Hybrids are technologically of doubtful benefit, and expensive, but necessary from a political and public relations point of view. The reduction in fuel consumption does not pay for the technological content and cost of the vehicle." GM Car Czar Bob Lutz, July 19, 2006. Fast forward to today… "While the overall U.S. vehicle market is down, hybrids are a bright spot in the automotive industry with this category projected to easily exceed 300,000 vehicles this year." This from R.L. Polk's Lonnie Miller. Compared to the first seven months of 2006, hybrid sales are up more than 49 percent. "Hybrids are being adopted by vehicle buyers in all regions at an increasing rate for many factors which include fuel prices, differentiating themselves from other consumers and environmental activism," Miller announced in a PRNewswire press release. Overall, the Toyota Prius captured over 50 percent of hybrid sales, followed by the Camry hybrid at 15 percent. Looks like the technology Lutz claimed best suited the "what-would-Jesus-drive crowd" is here to stay. “Hybrids have not hit plateau,” Miller affirmed.

After listing everything from the "Top 10 Summertime Toys" to "10 Cars that Could Get a Computer Geek Laid" (not really), Forbes gives us the "Top 10 Things To Never Say To A Dealer." At the risk of denying Forbes a couple of dozen unique visitors, the eds say these words should never pass through a car buyer's lips: I'm ready to buy (ka-ching!), I can afford this much (over twelve years then), Yes, I have a trade in (let the games begin!), I'm paying cash (we HATE you), I'm not sure what vehicle I want (we know EXACTLY what we want to sell), I've wanted on of these forever (SUCKER), I'll take the popular options (yum!), What's the lowest price? (and we can't go ANY lower), Sure I'll look at the numbers (step into my parlor said the spider to the fly), I think you can do better than that (**** you!). Forbes doesn't say what you should say to car dealer. We'll start the bidding with "Stiff me and I'll kill you."

Carseek reports that Microsoft is forming a partnership with Siemens to develop a line of ICE (in-car entertainment) products. Their goal: improve connectivity between car music players and mobile phones by 2009. The market for such "infotainment” is currently valued at some $38b, rising to $54b by 2012. Microsoft and Siemens are hoping “to bridge the gap between the relatively rapid development cycles common in information and communications technology and the long ones that are the norm for automotive engineering.” Time will tell if the tortoise and the hair will be able to cooperate and reach the finish line together.

Business Week (BW) reports that VW of America's newly anointed boss Stefan Jacoby wants to resurrect the ill-fated Phaeton luxury sedan. The Phaeton was a hugely expensive machine– both in terms of development costs and its $75k to $95k sticker– positioned against BMW and Mercedes. Customers were lined-up none deep. And yet Jacoby insists dropping the Phaeton was a big mistake–  that should be corrected. "A world class luxury sedan that doesn't show the luxury all over the place and that could have the only fuel efficient 12-cylinder diesel engine… that's funky." Get down with it 'bro! anyway, fans of the brand who despair that VW will once again be off chasing moonbeams should note that Jacoby is a consummate corporate player (check the anecdote at the end of the BW post). The Phaeton was VW Chairman (now supervisory board chairman) Ferdinand Piech's pride and joy. File this one under lip service and stand by for those small, well-built, frugal cars you've been wanting since Ozzie Osbourne's lead guitarist buzzed him in an airplane– and crashed into a house.   

Automotive News [AN, sub] is running a pro-GM byline-less piece under the heading "Running the Numbers." "Hummer, Saab: GM's conquistadors" argues that Hummer and Saab's sales may suck and the brands may be sickly, but they're worth keeping in GM's bloated portfolio because they attract non-GM buyers. The numbers certainly run in the right direction– some 61 percent and 50 percent of Hummer and Saab sales (respectively) involved a non-GM trade-in. But there's no evidence that this "new" loyalty will continue or trickle over to other GM brands. And no matter how you slice the badge-engineered Saab and Hummer pies, there's not enough of it to justify the struggling brands' ongoing drain on the company's rapidly diminishing resources. IMHO. 

It's no secret that the profit on a used car can be several orders of magnitude greater than the now-minuscule markup on a new car. It's also not unknown that an super-abundance of dealers and a deadly dearth of customers have left hundreds of Ford and Buick-Pontiac-GMC dealers in the soup, struggling to sell enough new cars to stay in business. Ward's Dealer Business reports a new trend: dealers who let their new car franchise lapse and carry on selling used vehicles. Unable to carry a 56 new car inventory, The Davis Auto Mart near Lansing, Michigan handed-in their Buick-Pontiac-GMC. San Diego's Bob Baker Auto Group ditched their Ford franchise this month. The movement will benefit The Big 2.8, who desperately need to trim their bloated dealer network. Meanwhile, it appears that there's plenty of life after dis-enfranchisement. The owner of Performance Auto Mall in Syracuse says the chief advantage of a new car franchise– access to good quality used cars– is history. "Years ago, with new-car shingles, we could go to factory auctions and buy good cars of all brands below market,” Ron Boukair told Ward's. "I now can buy a Chevy Impala for $1,000 less on the Internet than I could get at a closed factory auction." 

Despite my emphatic warnings to travel by livestock if needs be, sharp looks and a flea-market sticker price have helped the Mitsubishi Lancer GTS to sell out in the U.S. The sportier version of the Lancer is leagues ahead of the regular ES that was the target of abuse in the June review posted on TTAC. But it still bites, especially with the Communist "every RPM will suffer equally" continuously variable transmission. Still, this is fabulous news for Mitsubishi, which only a few years ago was considering switching from building cars to panhandling for change in Manhattan.  Escaping from the domestic-auto love nest has been great for Mitsubishi, and makes it yet another manufacturer to be better off away from GM, Ford, or Chrysler, along with Subaru and Suzuki. But three questions linger: can Mitsubishi bring over more Lancers to satisfy demand before too late? Will Mitsu use the new cash to upgrade to Playskool plastics? Can Mitsubishi revamp the Eclipse and Galant, two monstrously important cars for the brand?

How's this for gallows humor. What's the difference between Ford's Mercury franchise and the Titanic? The Titanic had a band. That little piece of levity arrives courtesy John Pico, a dealership consultant in Dallas. Speaking to Automotive News [AN sub], Pico pointed out that Chrysler killed Plymouth when the brand's new vehicle sales descended to 246k units, and GM pulled the plug on Oldsmobile when that brand's sales fell to 289k. Mercury's sales are currently below 200k, and heading south. Automotive News surveyed 125 Mercury dealers to do the math. No can do. Despite the fact that two-thirds admitted they sell fewer than 15 new Mercury vehicles a month, five out of six said Mercury's current product lineup is competitive. It better be; aside from a Merc version of the 2009 hybrid Focus, there is no new product planned for the brand. AN also reports that the "How great is that?" Mark LT pickup is about to go away. Yet still they believe. "Dealers in the survey said they hope Ford will apply proceeds from the sale of these European luxury brands to strengthening Mercury." According to Brian Allan, general manager of Galpin Lincoln-Mercury in suburban LA, "With the possible sale of Volvo, Mercury could be even more important in the near future for Ford Motor Company." Of this possibility FoMoCo's silence speaks volumes.

Interest-free loans haven't helped. Incentives up to $4K haven't helped. Maybe bribing the dealers will. Bloomberg reports that an internal GM memo states they're giving dealers cash awards to try to stop the seemingly inexorable sales and market share erosion. The General will give dealers a $250 bonus for every car they sell from August 23 through the end of the month. The dealers, in turn, "can use the money to boost discounts offered directly to consumers through most of September." Or they can just keep the money. In the memo, Buick, Pontiac and GMC general manager Jim Bunnell said, "We have an excellent opportunity to regain our momentum." Sorry Jim, but the last time your tri-division had momentum GM execs wore hats.